Amazon Allegedly Invested in Companies Then Released Competing Products

Amazon has followed a pattern of investing in technology companies and then using the data and marketplace research made available through that investment to launch competing products, the Wall Street Journal reports.

The story comes as Amazon faces increased scrutiny over its business practices and treatment of third-party sellers on its marketplace. Earlier this year, the Federal Trade Commission ordered five technology companies, including Amazon, to provide information on investments and acquisitions between 2010 and 2019 to see if any of the deals were anticompetitive. In July, the European Commission opened a formal antitrust investigation to determine whether Amazon’s use of data from independent retailers violated EU competition rules.

The new WSJ article shares the experiences of several startup businesses that took investments from Amazon’s Alexa Fund, which was created in 2015 to support companies involved in voice technology. Several of those companies shared sensitive feature plans and market data with Amazon, only to later see Amazon pull away from the relationship and launch a similar product.

“They find technology they think is extremely valuable and seduce people to engage with them, and then cut off all communication after initial sessions with an inventor or company,” Alfred Fabricant, a lawyer representing sound-technology firm Vocalife, told the WSJ. “Years later, lo and behold, the technology is in an Amazon device.”

To read the full WSJ article, please visit this page.